WINNIPEG – Winnipeg-based Legumex Walker Inc. (TSX:LWP) has struck two deals to acquire U.S. bean and sunflower seed processors for more than US$19 million.
The company said late Wednesday it has bought Minnesota-based St. Hilaire Seed Co., one of the largest dry bean processors in the United States.
Legumex paid US$12 million in cash for St. Hilaire, a figure which included US$3.5 million in working capital. As well, it refinanced US$2.5 million in long-term debt.
In another deal, the Canadian food company acquired sunflower seed processing assets previously owned by Anderson Seed Co. for US$4.8 million.
The assets include a processing plant in Mentor, Minn., and storage operations in North Dakota.
Legumex said the two deals expand the company’s position in the North American special crop industry and will boost profits per share.
President and CEO Joel Horn called the deals “a significant event for our company,”
Get weekly money news
“St. Hilaire materially increases the contribution from dry beans in our product mix,” he said after stock markets closed.
“It also diversifies our dry bean sourcing and processing through expansion into the American Midwest. The sunflower seed facilities offer us an attractive opportunity to expand the scope of our sunflower seed business.”
Horn said the expansion fits the company’s strategic growth strategy and allows it to “leverage our global sales and distribution network with well-established and well-regarded brands.”
“In addition, it brings us important new relationships with grower communities in Minnesota, North Dakota and South Dakota.”
St. Hilaire was founded in 1993 and employs about 35 people buying and processing pinto and black turtle beans as well as other beans and cranberries.
As for the sunflower deal, Legumex has set up a new division and will hire 25 people to operate it.
“We have deep experience in sunflower seed processing that will serve us well in this venture,” said Horn. “Our new sunflower processing facility is in excellent condition and we think there’s a great workforce in the Mentor area that we can quickly recruit to staff our new operations.”
Legumex Walker processes and sells lentils, peas, beans and chickpeas as well as other special crops and canola products.
The company has 11 processing plants in key growing regions in the Canadian prairie provinces and the U.S. Midwestern states.
In addition, it owns 85 per cent of Pacific Coast Canola, which is building a canola oilseed processing plant in Washington state.
Comments
Want to discuss? Please read our Commenting Policy first.